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UPDATE 1-Williams-Sonoma to cut jobs, spending
January 21, 2009 / 11:09 PM / in 9 years

UPDATE 1-Williams-Sonoma to cut jobs, spending

(Adds detail on cost cuts)

ATLANTA, Jan 21 (Reuters) - Home furnishings retailer Williams-Sonoma Inc (WSM.N) said on Wednesday it will cut 18 percent of its full-time work force and close a call center and distribution facility as sales slump amid the U.S. recession.

The company also pared projected capital spending for this year, and said it expects further overhead cost cuts in catalog production, information technology and logistics.

It expects to save about $75 million in costs on a pretax basis for 2009.

The company, which also operates Pottery Barn stores, still expects diluted per-share earnings at the low end of a previous range of 10 cents to 30 cents a share for its 2008 fourth quarter, even after taking a charge tied to the cost cuts.

Analysts expected a profit of 15 cents a share for the fourth quarter, according to Reuters Estimates.

Williams-Sonoma will cut about 1,400 positions, close a Pennsylvania call center and a distribution plant in Tennessee. It expects to cut job and occupancy expenses by about $60 million for 2009.

The recession and continued slump in housing has forced home-goods retailers to curtail growth plans and focus on bolstering liquidity.

Earlier this month, Williams-Sonoma said net revenue fell 22.6 percent to $729.4 million for the eight-week holiday period ended Dec. 28. Sales at stores open at least a year dropped 24.2 percent for the holiday period versus a 0.3 percent decline a year earlier.

The company also said Wednesday it now expects capital spending of $90 million to $100 million this year, down from a previous range of $95 million to $105 million. It sees retail leased square footage growth of about 2 percent in 2009, down from an earlier estimate of 3 percent. (Reporting by Karen Jacobs; editing by Jeffrey Benkoe)

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